Border towns feel financial impacts
WHATCOM — A recent trip to the Peace Arch border crossing showed maybe two to three cars go through in the course of 20 minutes. A year ago the line up could have faced a one to two-hour wait. The adjacent park was busier. Amidst the gardens, families quietly talked at tables. U.S. Border Patrol personnel noticeably made the rounds to make sure visitors saw the multiple signs that the Canada side of the park was closed.
In the meantime, small groups of masked Canadians walked along the side into the U.S. side. Overheard was one comment from a table, “It’s like we are in prison.”
Scaffolding surrounds the Peace Arch halting visitors from coming close as well. Fewer cars coming in: Fewer dollars coming in.
The New York Times used Blaine as focal point for the border closure – and its impacts. Back on Dec. 17, 2018, they visited Blaine for the impacts due to the change in currency exchange. The milk and gas weren’t quite as cheap as before for Canadians coming into the U.S. Fewer Canadians came, but the border was open and they still came.
In the U.S.-Canada Joint Initiative the United States and Canada it states the restrictions are “temporary”: restricting all non-essential travel across their borders, made effective March 21. Essential commercial activity will not be impacted to continue to maintain the economic supply chain. The suspended travel has included tourism and recreation. According to the U.S. Department of Homeland Security (DHS) the decision was implemented on March 21. The initial measure was for 30 days, subject to reevaluation and further extension. On May 19, these measures were extended until June 22.
The current extension is until at least August 21. This extension applies to both the north and south borders of the U.S.
Mayor Kyle Christensen of Sumas, who went through significant flooding prior to the COVID-19 US-Canada border closing, said they would be facing losses with this closure to their budget. He pointed out the small border towns such as his and Blaine rely also on less noticeable funds that come from the gasoline tax and also from sales tax. Many Canadians, he said, also have mail boxes to receive mail and shipments. Sales tax is based on the delivery address. Blaine and Sumas have elected to exercise their legislated option to apply a “border community” 1-cent/gallon option.
Lynden Chamber of Commerce Executive Director Gary Vis said he and his staff have maintained a minimal office presence during the COVID-19 shutdowns to approximately four hours a week for the office. Their events have been cancelled. Regarding the Canadian visitors, he said while Lynden appreciated them, much of what they seek to buy, such as electronics, is in Bellingham and bigger communities.
When companies request information about the area for business purposes, Vis said they are sure to provide the data without being reliant on Canada since most business comes from local shoppers: “Local visitors are the cake and they (the Canadians) are the icing on the cake.”
Whatcom Council of Governments (WCOG) and the Border Policy Research Institute (BPRI) at Western Washington University (WWU) have collaborated on periodic Origin-Destination surveys of regional cross-border trips, but these are not done annually, said WCOG Director of Planning Hugh Conroy.
“BPRI and WCOG have been working on a project exploring the impact Canadians have on Whatcom County’s economy and the local economies within it,” Research Analyst Erin Dahlman-Oeth from WWU replied by email. “It is difficult to isolate impacts from Canadians versus impacts from residents, but based on our most recent analyses, in 2019, Canadians were likely responsible for 55-73 percent of Blaine’s fuel tax revenue (or $95,000 to $124,000) and 44-60 percent (or $28,000 to $38,000) of Sumas’ fuel tax revenue.”
She added these percentages fluctuate historically.
Specific impacts regarding online purchases are also significant. “… in Blaine and Sumas, it is probable that they represent the vast majority of sales made there based on the evidence we have. In both cities, online retail sales as a per capita rate are five to six times greater than the County’s, on average. Additionally, online retail sales in both cities have a moderately strong correlation to Canadian passenger and pedestrian volumes. Based on these factors, my guess is that Canadians typically make up upwards of 85 percent of Blaine and Sumas’s online retail sales.
“Due to COVID-19 and the border restrictions, it’s likely that this Canadian spending doesn’t exist anymore (or at least nowhere close to where it was). We will know more as more data becomes available.”